© 2024 Alpha Spread Limited. All Rights Reserved.
www.alphaspread.com is not operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on www.alphaspread.com represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way. In no event shall Alpha Spread Limited be liable to any member, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on www.alphaspread.com, or relating to the use of, or inability to use, www.alphaspread.com or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance.
You don't have any saved screeners yet
Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Greetings, ladies and gentlemen. On behalf of IIFL, I'd like to welcome you all for the third quarter FY '23 Earnings Call with Power Grid management. To discuss company's business and share performance outlook, today we have the entire senior management team of Power Grid.
It's my pleasure to welcome and introduce Mr. K. Sreekant, Chairman and Managing Director; Mr. G. Ravisankar, Director of Finance and CFO; and Mr. Abhay Choudhary, Director of Projects.
I request now the CMD to make the presentation and the opening remarks, subsequent to which the floor will be open for Q&A. Over to you, sir.
Thank you. Thank you, Harsh, and very good morning to all the participants. I welcome you to the investor interaction for the third quarter results following. I will make initially a very brief presentation, and will look forward to your queries and interaction.
We are today the third largest CPSE in terms of gross block. We have our Pan India transmission network of 28 subsidiaries, primarily for the TBCB ventures and the 11 joint ventures. This is the summary of our asset base, 1,73,790 circuit kilometers with 1,448 numbers of lines, 270 substations all across the country, 85% of the interregional transmission capacity is owned by Power Grid.
In terms of current year's performance highlights, on the project execution [ print ], against a target of INR 8,800 crores CapEx, we have done INR 5,429 crores. On a consolidated basis, by the end of Q3, our capitalization was about INR 5,190-odd crores. And in terms of our -- Yes. Operational performance, 99.81% has been the availability, which is above the 99.75% cutoff for the purpose of receiving incentives. Trippings per line are better at 0.21 compared to 0.28 for the corresponding period in the previous year.
In terms of -- yes, these are some of the technologies which we continue to adopt for the asset management, including use of drones and helicopters for patrolling. [ Lot ] many apps and software have been developed for asset management in-house. These include asset health indexing and also -- particularly for large equipment such as transformers and reactors. And then there are plans afoot to develop an in-house AI/ML-based tool to do asset defect identification and rectification planning.
You will have seen the financial performance, which we have disclosed day before yesterday. For this quarter, there has been a growth in the income by 8% and PAT has seen a growth of 11%. This quarter, the consolidated income has been INR 11,530 crores and the PAT was INR 3,645 crores. On a 9-month basis, consolidated revenues were INR 34,048 crores, and the PAT is INR 11,097 crores, again, about 8% growth on the top line and 11% on the bottom line.
I think I'll skip these slides. You can see them in the presentation which we'll upload, giving the details.
I'll just draw your attention to this slide here. The debt:equity has been steady at 61:39. Going forward, we will see a little bit more improvement in the debt:equity, primarily because of the deleveraging that is happening, following repayment of debt which has been deployed in the past for construction projects.
These are some of the key information which is of interest, analyst questions based on this experience we have given. Incentive for the quarter has been INR 130 crores. For the previous 9 months, it has been INR 408 crores. Surcharge income has been INR 146 crores for the 9 months. I think these are some of the key. One of the major points is that the short-term loan has been repaid in this period, but I think this is a temporary thing. We may again have to raise short-term loan.
In terms of our other 2 key businesses, Telecom and Consultancy, this quarter we had about INR 187 crores of revenues from Telecom, INR 68 crores' worth orders have been received, new customers have been added. This is one of the key growth areas we are looking at for the data center business, where we have received the approval from the CERC for the use of the land at Manesar substation to set up a data center. And we are also expanding the [ whole ] network of OPGW through agreements with other state utilities to increase our reach.
On the Consultancy side, our income this quarter was INR 142 crores, primarily in the transmission and subtransmission works. Commercial performance, though billing and realization shows a tad less, 86% realization compared to INR 34,000 crores billing, we had about INR 30,000 crores of realization. This is primarily because of the past dues for the [ rider pooval ] system, so that is yet to be realized. The large [ billing has to be ] done for the past period. But otherwise, the receivable position is fairly -- quite okay. The [ property ] portal where their system is working, so dues beyond 75 days are automatically recovered. I mean, it is quite okay.
The 2 other businesses. Smart Metering, we have received the tenders. Price bids have been opened. So now, we are in discussions with regards to increase for the price and other parameters. Solar also, the 85-megawatt plant at Nagda, we have opened the financial bids and hopefully next year, we should see the [ megawatt ] starting there.
This is one key award which we have received during this quarter, the 2022 Platts Global Energy Awards under Corporate Impact of 1 of these CSR initiatives. We have received 2 patents which we filed long back. One is for the Energy-Efficient All-season Roof Screening. Another is Smart Socket and Smart Home Energy Manager, which we developed in collaboration with IIT Kharagpur. These are more demonstration projects. I am not sure what will be the commercial potential of these patents.
Now briefly, I'll look -- turn towards the sectoral outlook. In terms of the total power sector as such, as you are aware, there is an energy transition, so focus on renewables. You can see that the installed capacity is expected to grow at a CAGR of 9.55% from current 404 to 838 gigawatts by 2030. But the renewable capacities are likely to grow at about 20% CAGR. And in terms of energy requirements, we see about 5.06% CAGR growth, and that requires a significant investment in the transmission sector.
So there has been a plan released by the CEA for development of transmission system for integration of over 500 gigawatt renewable capacities by 2030. Covers various schemes such as the RE Park in Leh, Fatehgarh, Bhadla, Bikaner [ canusis ] schemes, and in Gujarat, at [ Kauda ]. And wherever there is potential, how do we plan to integrate that into the grid. This is the schemes -- I mean, various schemes identified and shown. Nearly 51,000 circuit kilometers of transmission lines are planned at an investment of INR 2,44,200 crores. Currently, bids have been submitted and process is on for an investment of project cost of about INR 23,000 crores. Another INR 34,000 crore investments have been approved, and they will be put to bid shortly. So there is a robust pipeline of transmission projects, which will come predominantly in the TBCB category.
As far as Power Grid is concerned, we have works in hand about INR 47,000 crore ongoing. INR 7,000 -- 20,000 crores, including TBCB. As I mentioned, our CapEx plan is about INR 8,800 crores this year, and we are putting all efforts to achieve this target by the end of 31st March 2023.
So I conclude my presentation here. Thank you very much for a patient hearing, and I'll open to your questions. Thank you.
Great, sir, thank you very much. [Operator Instructions]
So we'll take the first question from Lavina Quadros.
Let me type my question. You can move on to the next question. I think there is an issue in my line.
Next question from Mohit.
First question is, sir, on the monetization. Why the monetization getting delayed? And is there a new time line which you're looking at? I understand that FY '23 it's not expected, but how do you see in FY '24? That's the first question.
As far as monetization is concerned, this year, we had initially targeted about INR 6,800 crores. There has been an uptick in the interest rate regime and the unit expectations have gone up. So we are seeing a decline in the valuations, which compared to what we had initially at the time of the IPO for the initial round of monetization assets. So that is one.
And second, in terms of -- there is also a change in the basic thought process that the assets have to come back under the NMP structure. So we have to -- last time, what we did, we transferred the shareholding, and it was completely transferred. There is no getting it back at the end of the concession period or any [ susting ]. But under the current NMP, this is one of the requirements that we [Technical Difficulty] to the owner. So preparing a new structure for that, which is tax [ succession ] and all, took time.
I think instead of monetization through InvIT, we are looking at securitization of the cash flows and raising funds, so that is something which we are doing. And hopefully, about INR 3,000 crores we will raise before the end of this fiscal through this route.
So does it mean that we'll not transfer the asset in InvIT in FY '24 also? Is it the right understanding?
We have to look at it. I mean it's not that we will not do, but then there are issues which we have to resolve in terms of FA price discovery, in terms of the yield expectations. And then see that how do we balance the interest of our shareholders, the requirements of funds and raise funds at an optimal cost per power grid. So I think these are all considerations which will go into this monetization decision.
Understood, sir.
Second question on the smart meter. I think you've conducted the bid, and it's for INR 1 crore smart meter, right? Is the -- are we doing this smart metering only for 1 DISCOM or all 3 DISCOMs of Gujarat?
And second question is, is there any more opportunity in smart metering, apart from Gujarat?
Yes. We are looking at 2 DISCOMs where we have MOU in Gujarat. We are also looking at Mizoram, and then other places progressively. Once we gain a little of an experience, we will look at.
Last question on the transmission bidding. It looks like the -- of course, we have a very large opportunity to integrate the renewables, but the bidding hasn't been bid -- is very, very slow. There's hardly been any bidding in the last 9 months. How do we see going forward, especially for FY '23 and FY '24?
Sorry, Mohit, your voice has been cracking.
Sir, I'm talking about the transmission bids. The bidding has been very muted for 9 months. How are you...
You will see much, much more pickup. As I mentioned, INR 22,000 crore bids have been submitted. Like today, there is 1 project for which a reverse auction is on. A day before, we won a small project [ in the ] reverse auction. So there are INR 22,000 crore projects, about 14 of them which bids have been submitted, another INR 33,000 crores have been approved, so they will come for bidding shortly. There is a good pickup, I believe.
[Operator Instructions] Operator, can you unmute the line of [ Nitin Jain ]?
Yes. I have 2 questions.
So Y-o-Y and quarter-on-quarter, there has been a drop in the total borrowings, but the finance cost has gone up in the last 2 quarters. So is it due to the rise in interest rates? And if yes, then what is the quantum of rise that we have experienced?
And secondly, we have loans to related parties. So who are these related parties, and what are the securities that we have against these loans?
Loans to related parties are all loans to our own wholly-owned subsidiaries. So these are not secured. They are wholly-owned subsidiaries, so there is no security which we have. And these are typically [ unlinked ] for the purpose of TBCB projects. It is more efficient to raise debt at our parent level [ and not lend to the subsidiaries ].
Regarding the increase in the finance cost, there are 2, 3 reasons. One is the increasing capitalization, that is one. Second, [ FERV ], that is the exchange rate variation. A part of it is treated as finance cost as per the accounting standards, so that has contributed because the rupee has depreciated vis-a-vis dollar and we have some foreign currency borrowing.
And third is the increase in the interest rates of the floating debt. So as far as Power Grid is concerned, a significant amount is fixed debt in terms of debentures, so there is no impact of interest rate movement there. But we also have borrowings from the financial institutions, which are on a floating rate basis where, due to the change in the rates, the base rates, the MCLR, we are seeing the increase in cost. So typically, we borrow at MCLR, so the impact is whatever movement you have seen in the SBI MCLR or HDFC MCLR, that is the kind of impact we have. Or a couple of them are linked to repos, so the repo movement is also impacting it.
Okay. Great. And just 1 last follow-up, if I may, sir.
So the total employee count has been declining over the last 3, 4 years. So how should we, like, read this development from growth point of view for the company?
The employee count, it will increase. But at the same time, we are also kind of revisiting a bit of our composition, going for outsourcing and engaging on an external basis. So it will be stable to a moderate increase, but it will not be significantly declining.
Next is Puneet from HSBC.
Yes. So my first question is with respect to the bidding pipeline, you said the total opportunity is INR 2,44,000 crores. That would all be ISTS I would presume, right? And can you identify the opportunities outside the ISTS as well, and will you be participating in the same?
You're right. These lines are investment opportunity [ satisfy ] ISTS. Ideally -- I mean, it's very difficult to say how much requirement is there in the intrastate because it is all fragmented. State-by-state assessments are not readily available. But as a rule of thumb, I would believe that similar investment will be warranted in the intrastate system also, but the opportunity set there is a bit limited, because some of the states are doing it on their own. They are doing at a slow pace, but they are doing it on their own. They are not doing any bidding process. A few states like UP, Rajasthan, MP are doing [ building ]. But again, the base is not commensurate the requirement in my view.
Okay. And for the ISTS, what kind of competitive intensity are you seeing?
It is extremely high currently. We can see anywhere between 7 to 8 bps if the project size is smaller. Where the project size is larger, there are 5 to 6 bps. So when I talk of large, I mean say, about INR 900 crores to INR 1,000 crores kind of bps investments. There are schemes where the investments are on less than INR 500 crores, there we see more bidders. But as such, the competitive intensity has significantly gone up.
Okay.
And will it be fair to say when you say the reverse auction was conducted, you get to see the other person's spread and you can lower your bid? It's all the same process, right, which happened --
It's absolutely true. You are very right. The moment you see a bid, do you feel that if somebody else can do it at this price, I can always do it less than 0.25%, and then the race starts. So there is this issue which we are facing.
Understood. That's very helpful.
And secondly, on the smart metering side, is it possible to quantify the opportunity set in Mizoram, and how more can you do in Gujarat? And what is the pace of execution there?
The pace of execution is that they have to be done in the next couple of years. Though the total requirement in the country is about INR 25 crores, initially INR 10 crores is being targeted. We are targeting to do about INR 1 crores to INR 2 crores of [ maintenance ] here.
In next 2, 3 years?
We are doing it directly ourselves and also through one of the joint ventures of our joint venture. So IntelliSmart, which is a joint venture of EESL and NIIF is in the business. They are targeting to do about INR 2 crores, and we have 33% stake in EESL. So there is a kind of indirect participation there [ as ].
But how do you view this competition between IntelliSmart and Power Grid?
We don't compete.
So they have a separate opportunity set and you look at another one? Is that how --
[ they can in a vay us ]
So [ Vidishri ], could you unmute Anuj [ Sonilya ], please?
[Audio Gap] been outbid for the next 7 to 10 years. So another competitor of yours was mentioning that the overall CapEx outlay of the likes of INR 4,10,00 crores, but we are working with, I think, a very different numbers of about INR 2.5 lakh crores. And even though 500 gigawatt numbers that have just come in for the -- yes.
So can you please give the difference [ from sitting ] on how these numbers are, and what would be the right number to look at?
I think -- the INR 2,44,000 is the number in respect of the ISPS. So -- and then there are investment opportunities other than that in the intrastate and on. So maybe -- we are not putting a number there. Somebody is venturing out to put a number perhaps.
Does it answer your question, Anuj? I think there's some issue with his line.
[ Vidishri ], can you unmute --
Yes, yes. It broadly answers the question, yes. And my second question is on the lines of, so what would be the impact of tax [ engines ] on InvIT? And post, like, [ both these ] changes, would it ever go ahead? That's the second question.
I think InvIT questions, I will pass.
[ Vidishri ], can you unmute line of [ Anshuman ], please?
Sir, the first question on the Ladakh transmission line. So yesterday, the Finance Minister had also remarked on it and announced that the project cost is INR 20,700 crores, and the grant is INR 8,000 crores from the central government. Sir, just wanted to know some details on it. Does this include the battery storage component as well, and on the time lines of the project?
It does not include any battery storage component. As far as time lines are concerned, after the approval, we have to bid out and it will be about 5 years at least to execute the project.
And sir, should we assume that the project CapEx should start from FY '24?
Yes.
Okay.
And sir, previously, we had mentioned that the total project cost is INR 27,000 crores, including the battery component. So is that true?
There was 1 gigawatt [ our ] battery, which has since been changed. So there has been -- as the process was in deliberation, the project was under deliberation and review at various stages. There, it has undergone slight modification in the scope. Current cost is INR 20,772 crores, that doesn't include the IDC. So if you add the IDC and all, it becomes somewhere around INR 22,500 [ Rs ].
Okay.
And the second question, sir, in the notes to account, sir. So we have mentioned that as per the LPS rules, the total charge that we have taken is around INR 94 crores on the fair value difference. This was INR 127 crores in Q2, which you had mentioned. So has there been any reversal, or how should we look at this?
See -- yes. So it is like this, that you initially recognize the total discounted INR 127 crores, and then it gets revised to every quarter, you again fair value it and then account for the interest, no?
Yes.
So in effect, it becomes 97.
And all 127 will get unwound and recognized as income at the end of the -- whatever, 48 months or 36 months.
And sir, what is the total outstanding receivables which has been converted?
2,400 was the total, no? 2,400, we have somewhat [ carried out ], of which 600 we have a [ CVS ].
600,000 [ will be see ]. And any further amount which is expected to be converted through these rules?
It is past, no? That is only 1 time up to June, whatever was there. So it was done.
So if you don't mind, we'll take a couple of questions from the chat box.
The first question is from [ Krishna Kumar ]. And the question is, are you planning to exit your stake in PTC India? If yes, what is the reason?
Yes?
Are you planning to exit your stake in PTC India Limited? And if so, what is the reason?
It is an option on the table.
Next question is, what is the CapEx in the last 5 years?
Yes. So I think partly this has been answered, so that is the reason why I'd like -- we'll move on to the other one.
The other question is, what is the status of GEC Phase 2, and what is the opportunity size available here, if you can quantify?
GEC Phase 2 is mostly being executed by the states themselves. So it is partly funded by the grant of the government, and partly funded out of debt being provided by the multilaterals through the government. So there is hardly any opportunity set there. I think they are not going to bid out these projects. It is mainly [ entrusted ].
The potential opportunity with upcoming thermal CapEx by NTPC and some others as -- [ I'm saying ] some other states, what extent of it is included in 2028 interim plan? Can you help with total transmission opportunity size on RE plus conventional power projects until 2030?
Conventional is not yet very clear where are the new projects coming. Though there has been some deliberation to add, I think, nearly 27 gigawatts or so of conventional power. But then it is still -- those plans are not yet firmed up, so we are not having the transmission schemes drawn for them.
As far as RE potential is concerned, the road map has been given in this plan for reaching 500 gigawatt RE by 2030, which I discussed briefly in the presentation. About 51,000 circuit kilometers of transmission lines from various RE potential zones in Rajasthan, Gujarat, Tamil Nadu, Karnataka, all over the country have been drawn, and that has a potential identified investment opportunity of about INR 2.44 lakh crores.
Sure, great. We'll come back to the questions, live questions now. [Operator Instructions]
Over this fiscal so far, how many TBCB projects have been bid out in value terms, and how much have you won? And what is your equity IRR expectation for the projects won?
Which period you are asking, sir?
So far this fiscal. Fiscal FY '23 so far.
I think there haven't been many projects. We won 2 projects, and just -- can we go to the next question and come back to you in terms of this number.
Yes. And we'll also want the total value that has been awarded so far this year, including your win.
Then, what is your capitalization target for FY '23 and '24? Could you please refresh those expectations as well? And within your works in hand, what is the value of the Leh-Ladakh project currently, and was that the portion that was spoken about in the budget yesterday as well?
Yes. In the works in hand, Leh-Ladakh is about INR 22,000 crores. Next year, we should be seeing capitalization of about INR 10,000 crores. And as far as the return expectations on TBCB projects are concerned, I think the margins are under severe strain because of the intense capital -- I mean intense competition. So I think there will be some time, we have to focus on market share and forgo some amount of returns to maintain the market share.
So in the next 12 months, because there has been less award in the last couple of years, what would be a rational expectation of awards in TBCB projects?
As I mentioned, the next 12 months, we should see somewhere around 22 plus 33. So I'd say nothing less than INR 40,000 to INR 50,000 crores.
That will be very good to see. Finally, just 1 book --
[Audio Gap] thousand is already under bidding, 33-odd has been approved. So 33 when it goes to the market and then gets awarded, it should be 6 months. So I believe in the next 12 months, definitely INR 40,000 to 50,000 crores will be there for [ award ].
Just 1 bookkeeping point. If I look at the P&L for the first 9 months, the taxes -- the total tax has reduced by 51% to INR 11.8 billion. And if I were to exclude the reduction in taxes, then the profit growth gets wiped off. How should I understand this?
Sorry, it's not clear.
So I said that if I look at the total tax in 9-month period that you have in your P&L, it is down to --
When you compare the PBT?
Yes.
Okay. I think part of it is that you also have to adjust for the regulatory deferral receipts for the exchange rate variation because exchange rate variation expense, which is there in the other expenses and finance cost, is offset through the regulatory deferral. So if -- you need to adjust for that as well.
And that has a large tax impact.
That is not tax impact because it is below the profit before tax and regulatory. So you need to adjust for that.
We made that adjustment at the EBITDA level. We took those line item above the EBITDA line, and then we looked at PBT. There was almost a flattish to a slight decline in PBT for the first 9 months.
No, no, it's not. See, if you look at this presentation where the EBITDA gross margin is given, you see that movement in regulatory deferral balances is adjusted. Therefore, you see about 6% growth here. It is for the quarter, has grown up 6%.
We'll look at the presentation when it --
Yes, please have a look at the presentation, right?
[ Vidishri ], can you take the next question from [ Chinmay Kabra ]?
Yes, I think just 1 follow-up. We just have the information. The 1 question was how many we won in '22, '23. There were 5 projects, we won 2 out of the 5 in the TBCB.
Helpful, sir. [ Vidishri ], can you please unmute line of [ Chinmay Kabra ]?
I might have missed it. If you could just repeat, what is the expected commissioning in FY '24 and FY '25, if you could just probably repeat it?
It will be about INR 10,000 crores.
And this is total FY '24 and '25, or?
No, no, in '23, '24.
And could you give the breakup on a stand-alone consol level?
So this will be on consol level, including TBCB. [ Much of it will be ]...
Sorry?
Much of it will be TBCB.
[ Vidishri ], can you please take question from [ Sunil Kothari ]?
Looking at the last 5, 7 years experience and looking at 5, 7 years ahead, how do you see the project level change, and what's the opportunity for us?
5, 7 years going ahead, I think 1 is the RE and related transmission because that is 1 very apparent trajectory we see, that there will be growth in the solar and wind renewable energy capacities, and therefore there has to be more transmission for that. That is one.
Second is the -- which is potential is the battery storage. Though there is a lot of discussion around pump storage and investment and approvals for pump storage. So that is 1 area, but then we don't have much of an opportunity there as power grid, because pump storage is more [ civil ] -oriented and generation-oriented business. So whatever battery storage opportunities which will arise, that is something we have to look at. But at present, the battery storage costs are still high.
The third opportunity set is in terms of transmission for hydrogen and offshore wind. So that is a bit more time-consuming and the horizon is much longer than 5 to 7 years. In 5 to 7 years, we will definitely see crystallization of offshore wind on the Tamil Nadu coast or the Gujarat coast, and the projects would have taken off. And as far as green hydrogen is concerned, I think there is significant push in terms of investments in green hydrogen and for export and all. So there will be opportunities for the transmission of electricity for green hydrogen-related RE projects.
So I think these are some of the dimensions on which we can see growth going forward.
Sir. My last question is are we being [ submissed of ] Power Grid. It seems like...
Louder and clearer, please?
Yes. Sir, it seems that securitization is better opportunity than monetizing assets through InvIT. So [ what is ] your thought process, why we should not do more securitization and get this asset building going on?
So that is right, securitization being a better opportunity. It is one of the ways to raise fund. We are definitely adopting it.
Sir, can we take a couple of more questions from chat box, and then we'll come back to live.
One question is, can you give us some guidance on smart metering CapEx over the next couple of years? That's number one.
One is the smart CapEx. It is about -- say for a crore of meters, we can see somewhere around INR 5,500 crores to INR 6,000 plus crores of investment.
Sure, great.
And the second question is, can you provide some more color on why receivables have gone up?
The receivables have gone up primarily because there has been order for the driver tubular system, which is effective somewhere around September 19, I think, is when the first [ toll ] was commissioned. So that has accumulated a bit, and the entire amount had to be billed when the orders have been received from the CRC in the last couple of -- last quarter and the previous one.
And therefore, there is accumulation. The states of Tamil Nadu, Andhra Pradesh, I mean, Telangana, they are also asking for this system to be declared as a national transmission scheme, so that it is apportioned to all the constituents. As it is right now, it is predominantly loaded in favor -- I mean, towards the South states. So that is 1 of the reasons why they are not paying them until this is resolved. But I think this will get sorted sooner than later, and we should see a reduction in the receivables. This is 1 of the main reasons.
Otherwise, beyond 75 days, nobody is holding up any amount.
That's great to know, so thank you.
[ Vidishri ],let's come back to the online questions. Can you unmute line of [ Swati Jhunjhunwala ], please?
Just a small question on the CapEx, so what is your expected CapEx for the next year? And secondly, the INR 1 crore smart meters which you are seeing is around INR 5,500 crores to INR 6,000 crores. What is the time line for this to be completed?
So the smart meters will be completed, I think, in 2 years' time. And as far as the next year CapEx is concerned, it will also be a similar number, about INR 8,000 - 8,800 crores.
Again, it depends. If we get more projects out of this TBCB which are under bidding, we should be able to increase this guidance.
Great. So thank you.
Swati, any further questions you have? Okay.
[ Vidishri ], let's move on. Can you unmute line of Anuj Upadhyay?
Sir, what is the capitalization target for the current fiscal? And the work in hand, which we have to the tune of INR 47,000 crores, can you mention the executable time for this project?
This year, we should be seeing around INR 10,000 to 12,000 crores of capitalization. And the INR 47,000 crores includes [ Leh-Ladakh ] scheme, which is about INR 22,000-odd crores. So [ other scred ] should be executed within the next 2 to 3 years, and this scheme will take more, about 5 to 6 years.
Got it, sir.
And 1 on the smart metering thing, you just mentioned that it would take around 2 years' time. So was it -- you were referring to the Gujarat end of a INR 1 crore smart meter, or it was for something else?
Same thing.
Okay. And how much would be our proportion of revenue? Should I say instead of revenue, it would directly flow to the EBITDA level? How much would be our [ portion ]? Because I don't think so we are venturing into the manufacturing of the smart metering, we will be acting more as a...
No, no. It is purely rental for that smart meter which we are talking of.
No, no. So on an annualized basis -- I mean, okay. Just speak on an annualized basis, how much do we target to earn from this thing?
Sir, revenues will be when the INR 1 crore meters are all on. They should give you revenue of around INR 700 crores.
This is for our side, you're saying, sir, or is this a portion of the income which you are referring to, which will be attributable to Power Grid?
It is our direct -- INR 1 crore meters.
Our part. Our section, you're saying. That Power Grid will receive somewhere around INR 700 crores through this INR 1 crore meter.
Yes.
Sir, if you don't mind, I'd like to ask a question on behalf of 1 of our shareholders who has not been able to attend the meeting. And the question is mainly on the policy of dividend distribution.
This year, the Board has been quite generous and looks like of the INR 15 stand-alone EPS, INR 10 has already been paid out. If you can lead or guide us in terms of how would this dividend distribution policy be for FY '23, and can we expect a continuation of the same policy in FY '24?
Yes. I think our dividend distribution policy is well disclosed and it is followed also. So since last few years, there has been a significant increase in the payout. So, so long as we will continue to balance the requirement for our CapEx and distribution, so -- I mean, it will continue. I don't think -- last year, we distributed around 60%, right? That is the payout which we have done. I don't see any reason to reduce it.
That's great to know, sir. I think in the interest of time, that was actually the last question.
I really appreciate, sir, for sparing your time and giving great insights. Any last remark that you would like to make before we conclude this session?
So thank you very much for your participation and support, and we look forward to your continued interest in Power Grid.
Thank you very much, sir.
Ladies and gentlemen, on behalf of IIFL, I thank you all for joining in for this webinar. You may please disconnect your line. Thank you.
Yes, sir. Thank you. Bye.
[ Vishari ], we can close up. Can end the meeting, and cancel the recording.